What Amazon Gets Right

by Brandon Rigoni and Bailey Nelson

A recent article in The New York Times ignited a controversial discussion about Amazon, the world's largest online retailer, and its CEO, Jeff Bezos. The article describes Amazon's workplace culture as "bruising," characterized by maladies such as harsh management, towering expectations, gender inequality, excessive hours and annual "purposeful Darwinism" employee firings, to name a few. With some suggesting that the massive organization leaves workers in tears at their desks, Amazon and its leadership practices have come under fire.

Standing strong in the face of these claims, Bezos, along with other high-ranking company leaders, has vehemently denied the article's allegations -- saying the report in no way describes the "caring Amazonians" he leads or the strong work culture he strives daily to protect.

While some of the article's allegations, if true, would be inconsistent with what Gallup knows about engaging employees and promoting employee well-being, we contend that rather than pointing fingers based on unsubstantiated claims, it would be more beneficial and productive to focus on lessons that leaders can learn from Amazon. Because Amazon is doing at least some things right.

Data-Driven Leadership Philosophy

For starters, Amazon's data-driven approach -- supported by metrics on everything from customer behavior to the most effective recruiting strategy -- gives it a serious competitive advantage. According to the Times article, Sean Boyle, head of the finance division for Amazon Web Services, is a strong proponent of leveraging the organization's tremendous metrics. "Data creates a lot of clarity around decision-making," Boyle says. "Data is incredibly liberating."

Gallup's position on evaluating best practices and helping organizations implement solutions aligns with Boyle: Knowledge is power. A data-driven strategy is vital for systematic improvements of processes, procedures or any other aspects of the organization. By capitalizing on its expansive metrics, Amazon works to further its customer service and marketplace advantage by leaps and bounds.

Hire and Develop the Best

In his book about the 14 leadership principles that have informed Amazon's decisions and its "distinctive leadership culture," John Rossman, former director of Enterprise Services at Amazon, discusses one of the company's guiding principles: to hire and develop the best workers.

The Times article portrays this strategy in a negative light, suggesting that Amazon ignores employee needs and creates a cutthroat, competitive culture where workers hold each other to unreasonable standards. Regardless of whether these claims are factual, Gallup's experience supports the heart of the principle, that selecting based on talent and developing each employee to encourage individual growth is a winning approach.

Equipped with data showing what high performers in a particular role do differently, an organization can hire talented employees to do what they do best every day. For one Gallup client, a Fortune 500 company that relies on Gallup's talent-based hiring approach, the value of hiring Gallup-recommended candidates was worth about $47 million in additional topline annual revenue. When employees are the right fit -- for the role, culture and team -- it's a win-win-win for the individual, the organization and the customer.

Great Managers Further Team Success

Many of Amazon's management practices are smart, and they appear to be serving the organization well. In The Amazon Way, Rossman describes Amazon's seventh leadership principle, "Think Big," which encourages leaders to "create and communicate a bold direction that inspires results." This strategy, at face value, is supported by everything Gallup knows about management.

Our research indicates that an organization's mission or purpose must be communicated from the top down -- and that when leaders prioritize ongoing communication, the outcomes are powerful. The way a company's leaders define, display and disseminate an organization's purpose and brand influences whether employees embody those values, especially with customers. Great leaders clearly and consistently communicate where the organization has been and where it is going, helping employees to know what's expected of them and to see their role as more than just a job.

Amazon currently benefits from a number of operational competitive advantages, but it would be a mistake to assume that everything the organization does from a human capital perspective contributes in an equally positive way to its continued success. We need to be careful to not overinterpret some of the company's unconventional practices. Perhaps Amazon is winning in spite of some deficiencies by benefiting from hiring top talent, but it would benefit even more from fully engaging its top talent to get the most out of that talent.

As leaders seek to learn as much as possible from Jeff Bezos and Amazon, it's equally important to recognize that what may work for some will not necessarily work for others. One size doesn't fit all when designing organizational solutions -- from customer engagement to recruiting strategies -- and it's crucial to ensure your tactics are the best fit for your organization and its people. Nevertheless, while we shouldn't necessarily attempt to carbon-copy all of this retail giant's tactics, leaders should be inspired by its research-backed practices, which shed light on the organization's overwhelming global success, and should customize them for their own businesses.

By following strategies with proven links to business outcomes -- such as ensuring that leaders take ownership for communication, selecting based on talent and relying on data for ongoing growth -- leaders can position any organization for sustained high performance.

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